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Options For Small Business Owners Who Can't Obtain Loans by Persephone F. Gelson In today's economy it is hard for anyone to get a loan. Having bad credit, no credit, and/or little to no collateral makes it exponentially hard. There are two good options for entrepreneurs and small business owners who cannot get a traditional loan: 1. Build Business Credit 2. Accounts Receivable Financing (Factoring) Building Business Credit This is one of the first things that specialists suggest because it sets companies on a better financial path. Separating your personal credit from your business credit is also incredibly practical because it means that your bad credit will not affect your company and the type of loan you can obtain for your company in the future. It does however take a few years to establish business credit but it is simple to get started. Financial experts state that to build business credit you should formalize your business (as an LLC or sub-chapter S company), obtain business credit cards, vendor credit, a business checking account, and a phone under the formal name of the business. They point out that it is important to call the phone and credit card companies to verify that they report payment histories to the credit bureaus. It is also important to make sure that your personal information is not tied to your business accounts. Some business credit cards will still require your personal information, but you should avoid signing up with any that do. It may take some time to shop around but it is well worth it to clearly separate your business finances from your personal finances. Accounts Receivable Financing (Factoring) This is another financial option for business owners who cannot obtain a traditional loan. It is a good option for businesses that have many open invoices. It is also a good way to obtain cash quickly for your company. Factoring is a financial method that involves three things: receivables, debtors, and a factor. Receivables are open invoices that you can sell for a discount to a company known as a factor. The factor then attempts to collect payment from the debtor. Each factor has different policies and procedures, service fees, interests rates, and so on. Financial specialists suggest shopping around for a company that will benefit you the most. Looking to find the best deal on Phoenix small business loans, then visit www.PerformanceFunding.com to find the best advice on Phoenix small business investing for you.